Iran May Keep Same Oil Output If Others Extend Cuts, Kuwait Says

Oil declined below $53 a barrel as the USA continued to ramp up drilling, stoking concern that the nation's surge in output this year will offset OPEC-led efforts to cut a global supply surplus.

USA crude oil production has climbed to 9.24 million barrels per day, according to the latest Energy Information Administration data. The EIA added that total motor gasoline inventories increased by 1.5 million barrels last week and are now near the upper limit of the average range.

US crude futures closed the day down 3.76 percent, trading at $50.44 per barrel and hovering only slightly above the key $50 level, while Brent crude futures dropped almost $2.30 to trade around $52.70 a barrel.

On Wednesday, the Organization of the Petroleum Exporting Countries' Secretary-General Mohammad Barkindo called on all non-OPEC producers who aren't part of the output-cut agreement to join the pact, according to a news report from Platts.

Gasoline stockpiles rose by 1.5m barrels to 237.7m barrels during the week ending on 14 April, while those of distillate fuels shrank by 2.0m barrels, according to the Energy Information Administration, the US Department of Energy's statistical arm.

Oil prices are on pace for their biggest daily percentage decline since early March, and US crude oil production is expected to rise in both 2017 and 2018.

Geopolitical concerns have also helped underpin oil.

The overall impact was limited, especially as Saudi Arabian Oil Minister Khalid al-Falih stated that it was premature to discuss an extension of OPEC production cuts.

The American Petroleum Institute (API) reported a draw of 840,000 barrels in United States crude oil inventories, compared to analyst expectations for a healthier crude oil draw of 1.5 million barrels.

Nigerian crude was also preferred by United States refiners as her oil is of similar quality to that produced in the Bakken region in parts of North Dakota and Montana. The Organization of the Petroleum Exporting Countries, which includes major oil producers like Saudi Arabia, Iran and Venezuela, agreed a year ago to curb output and help stabilize prices.

In London, June Brent crude LCOM7, -3.75% on the ICE exchange shed 16 cents, or 0.3%, at $54.73 a barrel. "So that gives the market pause at how effective they're going to be at taking oil out of the market". OPEC's 13 national ministers will next decide on May 25 whether to maintain their production caps.